Drug stocks gain; Athersys soars for second day

ValBrickates Kennedy

BOSTON (MarketWatch) -- Drug stocks advanced Tuesday as shares of Athersys Inc. soared for the second day following news it has entered into a collaboration with Pfizer Inc. for its stem-cell therapy MultiStem.

Shares of Athersys
ATHX, +1.25%
were up almost 120% at $5.18 after rocketing over 150% on Monday.

Early Monday, Athersys said it entered into an agreement with Pfizer
PFE, +2.88%
for the commercialization of MultiStem in the treatment of inflammatory bowel disease. Under the deal, Athersys will receive $6 million upfront, plus up to $105 million in possible future milestone payments. Athersys will also receive royalties on sales.

On Tuesday, analysts at WBB Securities raised their rating on Athersys to buy.

Late Monday, the drugmaker said it is increasing its quarterly dividend by 3.2% beginning in the first quarter 2010. The company will now pay 32 cents a common share quarterly and $1.28 a share annually. The next quarterly dividend is payable on Feb. 1, to shareholders of record as of Jan. 4.

Bristol-Myers also announced a quarterly dividend of 50 cents a share on its $2 convertible preferred stock, payable March 3 to shareholders of record as of Feb. 8

Shire said Tuesday that it has submitted its market application with the U.S. Food and Drug Administration for its drug Replagal, a treatment for the genetic disorder Fabry disease.

If approved, Replagal would compete with one of Genzyme Corp.'s
GENZ
top-selling products, Fabrazyme. Shire's Replagal is already approved in 45 countries.

The FDA has allowed Replagel to be supplied to certain patients in the U.S. because of on-going shortage of Fabrazyme due to manufacturing problems at a key Genzyme facility.

Shire also said that it expects the FDA to decide on whether to approve its Gaucher's disease drug by Feb. 28. If approved, the product would compete against Genzyme's flagship drug Cerezyme, which is also in short supply due to Genzyme's manufacturing problems.

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